Loyalty Programs - to increase sales and create a loyal following of customers.

Background:  

Canadian Airlines International was an international Airline, serving Canada and the US, as well as Europe, Asia, Australia and South America. They were a quality airline, respected for their service and high levels of equipment maintenance, with sales of $1,000,000,000.

How we invented their Frequent Flyer Loyalty Program:

Over 10 years ago, Canadian Airlines asked us to create a customer rewards program, to recognize their frequent travelers. They especially  wanted to capture more of the business market, as business travelers travel more frequently and at a higher fare. A higher fare transfers completely into more bottom-line profit for the Airline. We expected that travelers would prefer Canadian Airlines over their excellent competitor, Air Canada, in spite of the near-identical service and schedules. It worked!

Loyalty Programs were a revolutionary concept at that time

We created a program that would give points for each mile traveled. This might seem elementary now, but at the time this was a revolutionary concept. We developed Direct Mail Programs to encourage frequent travelers, especially business travelers, to join their program. Canadian Airlines' reported that their market share rose from 33% to 51%, over time, against their strong competitor, Air Canada. Air Canada had matched with their own frequent flyer program, but with far poorer results. We built the Canadian Airlines program to 1,500,000 members while Air Canada had merely 500,000 members. Air Canada outspent Canadian yet still couldn't match our programs' performance.

This program was credited with increasing Canadian Airlines sales by $2.25 Billion.

How we created "gold" for the Frequent Flyers

We started with the idea that if we treated their membership points as "gold", so would the frequent flyers. We also created hundreds of individual promotional campaigns to encourage the flyers to tell us more about their habits, destinations and preferences. Ultimately, we learned so much about the travelers that we could use the information to better market the airline. When a new route was opened to, say, Beijing China, we knew in advance who would be flying there for business, because we'd asked earlier about what destinations they flew to. When a new deluxe class was featured, we knew the specific travelers who would willingly pay more to experience an upgraded service. We knew who the top users were, and we knew details, so we could invite these select travelers to special events matching their interests - such as the launch of a new destination. With the increased popularity of Frequent User Programs, they've now become known as "Loyalty Programs".

How "involved" were the users?

That's a question that needs to be asked. If your regular mailings are relevant and valuable, then the response to promotions and mailings should be good. We averaged a response rate of 25% with our programs - over a 10-year period - so we knew the loyalty members liked what we were doing. A typical response rate is 2 to 4% for Direct Mail. Over the same 10 year period, we increased their sales by an estimated 2.25 Billion dollars.

How we won a big award for Canadian Airlines

Canadian Airlines was acknowledged with the "Marketer of the Year Award" by Sales & Marketing Executives of BC. This award was rarely awarded, so Canadian's marketing expertise was certainly recognized. We, along with their excellent Ad Agency, McKim Advertising, were both acknowledged for the significant role we each played in marketing this airline. Of course, it took a great client, with a desire for significant growth, to accomplish this.

Why Frequent User Programs work so well

Firstly, the knowledge gained from the travelers enabled us to send the travelers very specific mailings, so they got LESS mail, but it was more relevant to the travelers. The Airline saved money. Secondly, the traveler got sent mailings that were specific to their habits and needs, so they were happier. And the third, more subtle reason, is that Canadian Airlines was able to tell their best travelers how much they appreciated their business. Canadian Airlines did it in a tangible way, by rewarding the behavior that they wanted most. The Airline did well. The travelers were happier. A win-win situation is always the best strategy.

Now that's exciting! 

 How can you use a Loyalty Program in your business?

Now, it's true that you're probably not an airline, but you can still do a program that will significantly increase your sales. Surprisingly, it's not the size of the company that matters. Each program is tailored to the individual needs of the clients. And importantly, to the individual needs of the customers who buy from you. This is important - your business will best be able to serve the customers by understanding their needs. We'll help you understand your customers better, even if you've spent 20 years selling to them, and you think you know their motivations.

We all want to be appreciated

We have worked, slept, breathed Loyalty Programs, for so long that we understand the dynamic that's taking place. Customers, and all of us, want to know they are loved. And without being gushy, you'll be able to tell your customers how much you appreciate them. These inexpensive ideas are perceived as caring and thoughtful by the customer.

How to keep your Competition from stealing your Customers

We all have competition. Once you've got a loyalty campaign underway, you will be cementing your good relationship with your customers. You're also effectively barring entry by your competition, because you and your customer have a  relationship.  Imagine how expensive it will be for a competitor to dislodge your customers.  Your customers will tend to stay with you even when your price is higher -because they care about you. Customers love being catered to - they appreciate that your company cares about them. The amazing thing is, Loyalty Programs work, and they work well.

A word of caution

You cannot simply announce a bogus points program, and do monthly mailers, and expect it to work. It takes more - a genuine caring attitude, and a way to reflect that in the promotions and mailers. For Canadian Airlines, we wrote every word, selected every photo, concocted every offer with a single purpose in mind. And when the client headed in the wrong direction, we gently pulled them back into reality. They couldn't allow themselves to poison their own promotions with even one promotion that is grossly self-serving. It's always best to have a win-win situation. Now, this does not mean you don't sell strongly. You do promote aggressively, within the context of your Loyalty Program. Every time we chose to "play" with our Canadian Plus members, 25% would participate by responding to us by mail. 

It is not expensive. It is targeted.

Very targeted. So each mailer goes specifically to an interested user, who will read everything you tell them, if it's done right. We frequently achieved response rates of beyond 30%, figures that are far above the "normal response rates" of 2% to 4%. Others in the Direct Mail industry will declare that's impossible, but it's true. These figures are from publicly-released data, such as Canadian Airlines contest entry at the Echo Awards DMA-New York, which had an actual response rate of 32.6%.

How can you benefit from a Loyalty Program?

If you'd like the benefits of a loyalty program for your company, contact us. We'll show you just how amazing a campaign can be. Almost any company with a regular customer base will benefit from a loyalty program. And we'll be honest with you - if we don't think it will work for you, we'll tell you.

See some samples of actual Canadian Airlines Campaigns

Perhaps you'd like to see some samples of what we've actually done for Canadian Airlines. These are tested campaigns, tested so they work, tested so they are economical, and they all have some unique "twist" to make them memorable. Most of the ideas would apply equally well for non-airline users. To see Case Studies of actual Direct Marketing campaigns that we did for Canadian Airlines, click here: 

Perhaps you have a struggling Loyalty Program in place already?

Maybe we can turn it around for you, or at least tell you what needs changing, replacing or retiring. Very seldom do we recommend shutting down an existing program. To quote Billy Bob Thornton: "Marketing is Everything."  We can probably put a team into place for you, if yours needs refreshing. We have experts in the Database and Call Center areas too.